Seven Group said on Tuesday that it had raised $500 million from institutional investors in what is says was a “significantly oversubscribed” placement with strong support from domestic and international investors at $22.50 per new share.
The money would now go towards reducing debt and retiring higher interest loans with new lower-interest loans. And the 22.2 million new shares will increase the free float as Stokes and his family didn’t participate in the issue.
That will see the Stokes stake in Seven Group fall to around 38.8% from around 42% – still a dominant position.
“We are very pleased with the strong support shown by both current institutional shareholders as well as new investors for SGH’s decision to strengthen our balance sheet and refresh our capacity for portfolio growth opportunities,” Mr Stokes told the ASX yesterday. The new shares will start trading on 23 April.
Retail shareholders will be offered a share purchase plan at the $22.50 a share for big shareholders.
That is a skinny 2.5% discount to last week’s trading price.
However, shares dropped more than 4% to $22.40 which gives retail shareholders no discount on the current trading price and little incentive to support the issue.
That makes getting the $50 million a tough ask, especially as there has been little engagement with non-institutional shareholders by the company in recent years.
Raising $20 million would be a good result from the retail base.